The 1037 damage is from the "damage cap". Damage hits a cap when you are a certain level above enemies. That's why when you make non precision shots the numbers are grey instead of white.
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That explains it. So, overall, FB was not nerfed. I get the same max damage as before. I'd go so far as to say it was buffed, because firefly is much more satisfying with instant explosions instead of the delayed ones. It also seems to have more AOE now
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Yup. I am downloading the update currently. I can't wait to try mine out. Also watch out, along with the damage cap come a defense cap for the guardians. It's something like you take the same damage from lower level enemies as if you were the same level as them.